Complex organisational structures are becoming increasingly common in Australia’s charity sector, and the ACNC has now provided its clearest insight yet into how charities are managing them. The regulator’s latest review from 20 October 2025 looked closely at charities operating through groups of multiple entities and found that, despite the challenges, many are navigating this terrain with confidence, transparency and strong governance.
Below, we unpack the ACNC’s key findings, and then set out practical guidance for charities operating within (or considering adopting) a complex structure.
What the ACNC Review Found
Complex Structures Not a Problem, but a Responsibility
The ACNC stresses that a “complex structure” is not intrinsically risky or improper. In fact, for many charities, using multiple entities is the most effective and legally appropriate way to deliver their programs, manage risk or access funding.
A complex structure might involve:
- a mix of charitable and non-charitable entities
- different entity types (trusts, CLGs, private companies, incorporated associations)
- operations across different states or overseas
- shared assets, staff or related-party transactions
- boards or directors sitting across multiple entities
These arrangements are common in charities with diverse activities, from service delivery and trading arms to advocacy, fundraising, and social enterprises.
ACNC Commissioner Sue Woodward AM emphasised that “without careful management, these issues can lead to inadvertent non-compliance. But our review shows most charities are trying to do the right thing – and many are doing it very well.”
Review Found Strong Governance Across the Board
Reassuringly, every charity reviewed demonstrated satisfactory governance, underpinned by three key behaviours:
They could clearly articulate why their structure existed: Whether for risk isolation, operational diversity, asset protection or regulatory requirements, their structures were deliberate
Their systems were tailored to the structure: These charities sought specialist legal, financial or governance advice and built governance frameworks that suited how their entities interacted.
They regularly reviewed their structure: Nothing was left on autopilot. Boards assessed whether the structure remained fit for purpose and whether governance practices needed updating.
Why Charities Choose Complex Structures
The ACNC highlighted several legitimate reasons charities adopt multi-entity models:
- Flexibility: Different vehicles for different activities
- Risk management: Ring-fencing higher-risk operations
- Specialist oversight: Tailored boards for specific programs
- Shared services: Reduced duplication across finance, HR, IT and governance
- Regulatory need: Compliance with jurisdictional or tax requirements
As the review shows, complexity often supports a charity’s mission.
The Governance Risks Identified
Predictably, the ACNC found complexity brings extra governance demands. Key risks included:
- heavier compliance loads across different entity types
- fragmented decision-making between separate boards
- higher likelihood of conflicts of interest
- uncertainty about which entity a decision relates to
- different legal obligations for for-profit vs charitable entities
- increased visibility of related-party transactions
But, critically, these risks were being managed well by the reviewed charities.
Strong Practices Observed
The ACNC highlighted several governance practices worth emulating:
- Separate, well-documented board meetings for each entity
- Group-wide governance frameworks where appropriate
- Regular training on directors’ duties and conflict management
- Independent specialist advice for legal or financial issues
- Periodic reviews of whether the structure still suits the organisation
These behaviours were central to achieving compliance and ensuring strong oversight.
Guidance for Charities Operating Within Complex Structures
The second part of the ACNC’s announcement focuses on practical steps charities should take to manage risks and maintain compliance. Whether a charity is already operating in a complex structure or considering one, the ACNC’s guidance provides a clear roadmap.
Strengthen Financial Governance
Complex structures often involve shared resources, inter-entity transactions and multiple regulatory frameworks. Charities should ensure strong controls around related-party transactions, entity-specific record keeping, and oversight of revenue, costs and asset movements across entities. Transparency is essential, especially where charitable and non-charitable entities coexist.
Manage Conflicts of Interest and Duty
Shared directors and overlapping boards increase the risk of conflicts. Charities should identify conflicts early, document disclosure and management processes, avoid situations where one entity’s interests compromise anothers, and ensure each board acts in the best interests of its specific entity. Clear conflict policies are non-negotiable.
Be Clear About Roles, Responsibilities and Decision-Making
Every charity in a group structure should know which entity employs whom, which board makes which decisions, what decisions relate to which entity, and where legal responsibility sits. Ambiguity is one of the biggest contributors to accidental non-compliance.
Maintain Fit-For-Purpose Policies
Policies should be tailored to each entity, consistent across the group where appropriate, reviewed regularly, and supported by accurate and accessible record-keeping. Where entities share staff or resources, group-wide frameworks can promote consistency.
Understand the Regulatory Obligations
Charities must remember that all registered charities (except Basic Religious Charities) must comply with the Governance Standards, that charities operating overseas must comply with External Conduct Standards, that all charities must meet ongoing ACNC registration criteria, and that record-keeping and reporting requirements still apply to every entity
Seek Specialist Advice
The ACNC strongly encourages charities to obtain professional legal, financial or governance advice when establishing a group structure, undertaking cross-entity transactions, managing shared staff or assets, handling high-risk programs, or reviewing whether their structure is still appropriate. Good advice early often prevents significant issues later.
Implications
The ACNC’s review tells us that complex structures are not a governance problem, but poorly managed structures are. The best-performing charities are those that adopt complexity for the right reasons and tailor their governance to suit their structure. As the sector continues to innovate and diversify, this review provides valuable guidance for any charity seeking to balance operational flexibility with strong, responsible governance.
For any charity queries, please reach out to Warlows Legal using the contact information below.
ACNC releases findings of review into charities operating within complex structures
